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Lucky Investors Trade More: Evidence ffrom a Large and Salient Exogenous Price Shock

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  • Brito, Matheus
  • Chague, Fernando
  • Bruno Giovannetti, Bruno

Abstract

This paper examines the impact of luck on retail investors’ trading activity. We document an increase in trading activity and a worsening in the performance of lucky investors. We considered lucky investors who sold stock before an unexpected environmental disaster that caused a significant devaluation of this stock. After the event, lucky investors present 11% of portfolio turnover, 46% of numbers of trade, and 35% of the number of days with trade higher than similar investors. Also, the portfolio return risk-unadjusted is 6% and adjusted is 4% lower for lucky investors. Placebo tests indicate that our results are due to this specific stock by investors that sold this stock, and no effect is found using past outcomes.

Suggested Citation

  • Brito, Matheus & Chague, Fernando & Bruno Giovannetti, Bruno, 2026. "Lucky Investors Trade More: Evidence ffrom a Large and Salient Exogenous Price Shock," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 43(2), May.
    • Handle: RePEc:sbe:breart:v:43:y:2026:i:2:a:93500
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